DCC: Business services group DCC today reported that its half yearly profits rose by 17.6% to €60.4m, with all five of its divisions reporting operating profit growth.

Revenues for the six months to September 30, rose 41% to €3.97bn and the company announced an interim dividend of 26.11 cent per share, up 10% on the same time last year.

Group revenue increased by 37.3%, on a constant currency basis, primarily as a result of acquisitions, particularly those in DCC Energy which had a 31.0% increase in sales volumes.  Excluding DCC Energy, Group revenue was 11.0% ahead of the prior year on a constant currency basis. 

Davy analyst Caren Crowley commented: "Adjusted earnings growth was predominantly driven by the impact of acquisitions on the top-line and good cost management. Encouragingly, all five divisions contributed to group operating profit growth and all businesses beat our forecasts.

In DCC Energy, the group's largest division, operating profit was up 14.8% yoy on a constant currency basis to €30.1m. The increase was a result of cost synergies from prior-year acquisitions in the UK and a very strong performance from DCC's relatively new oil distribution businesses in Denmark and Austria. Encouragingly, DCC Energy's organic sales volumes grew by 1.2% in H1 FY2011 versus a decline of 8.4% in the corresponding period last year.

DCC's second largest division, DCC Sercom, delivered modest EBITA growth (+1.3% on constant currency basis), and the €14.3m out-turn was 3.8% ahead of Davy's estimates. A strong performance from Sercom Distribution balanced the expected decline in profit from the Supply Chain Management business.

All of the three remaining divisions achieved high-double-digit operating profit growth through a combination of cost reductions (Food and Beverage), bolt-on acquisitions and new customer wins (DCC Healthcare) and consolidation of profit (DCC Environmental).

There was very little news by way of acquisitions. DCC has expanded its IT distribution business in the UK with the acquisition of Codework, a small distributor of enterprise software. Management maintains that its strong financial position (net debt at end September was €98.6m) leaves 'it well positioned to pursue acquisition opportunities arising at this time'.

Davy View: Although cognisant of the fact that H1 is the lesser of two halves, this is a very good start to DCC's fiscal year and belies DCC's relative underperformance of the FTSE250 index. The modest improvement in earnings guidance for FY 2011 implies some slight upwards revision to our forecasts. We retain our 'outperform' rating."

Results detail

Hans Redeker, global head of foreign exchange strategy at BNP Paribas, speaks about the political implications of a possible rescue package for debt-ridden Ireland, with CNBC's Maithreyi Seetharaman:

Norkom: Financial software group Norkom today reported an 8% fall in revenue for the six months to the end of September. Revenues dropped to €22.6m from €24.6m.

Half yearly pre-tax profits dipped to €252,000 from €3.178m and adjusted earnings fell to 1.60 cents from 4.22 cents.

Results detail

The euro will see renewed weakness next year as sovereign debt concerns continue and economic growth starts to weaken again, says Callum Henderson, global head of FX research at Standard Chartered. He discusses the euro's prospects with CNBC's Oriel Morrison:

Economic View: Rehn’s calls for cross-party support on four-year plan just an aspiration? Goodbody chief economist, Dermot O’Leary, comments  -- "Much of the commentary from Economics Commissioner Olli Rehn, following his meeting with the Finance Minister last night, was far from earth-shattering. However, coming at a time when bond yields continue to hit new record highs, thus shortening the odds of Ireland having to avail of EU financial backstops at some stage, they do indeed carry a lot of weight.

Unsurprisingly, the Commissioner backed Ireland’s plans, announced last week, to target a fiscal adjustment of €6bn in 2011, while highlighting the strengths of the Irish economy and its ability to fight this crisis. He reiterated his previous statement that Ireland must cease to be a low-tax economy without elaborating on whether this includes corporation tax. Ahead of his meetings with opposition political parties this morning, he also stressed the need for cross-party support on fiscal plans. Unfortunately, we have been there and done that, with talks between the main political party leaders ending with a whimper after a few hours of talks three weeks ago.

We have advocated such an approach for some time, but we have our doubts about it actually happening at this stage. Opposition parties have made it clear that they want a General Election to be held rather than be bound by the decisions of this government. Although the Commissioner may try to convince the opposition of the importance of removing some of the political risks associated with Ireland, this removal is more likely to happen by way of an Election, rather than consensus, in our view."

With gold touching fresh highs overnight, Puru Saxena, CEO of PuruSaxena Wealth Management, shares his outlook for the price of the yellow metal with CNBC's Karen Tso and Bernard Lo:

Real economic data send mixed signals as bond markets remain unambiguous: Davy economist, Aidan Corcoran, comments  -- "The seasonally adjusted Ulster Bank Construction Purchasing Managers' Index (PMI) fell for the second month running to 42.3 in October from 44.5 in September. The reading is the lowest since May and signals a relatively steep reduction in construction activity ahead. Uncertainty about the wider economic environment was cited as a key reason for the decline in new business.

One precursor of October retail sales gave a more positive signal yesterday (November 8th). The total number of all new vehicles licensed in October was 4,838 compared with 2,790 during the same month in 2009 – an increase of 73.4%. While the relatively strong finish to the year is a good sign, it will take months of strong growth to return to normality. The total number of all new vehicles licensed in the first ten months of 2010 was 99,200, while for 2008 it was 190,000. Normality lies somewhere between, but it is clear that year-to-date sales remain at depressed levels.

It may be that bond markets trump the real economy as the key determinant of Irish fiscal sustainability. Yesterday's further 28bp widening of Irish ten-year debt over bunds saw spreads finish at 5.48%."

US Markets

In New York Monday, the Dow fell 37 points or 0.33% to 11,407.

The S&P 500 slid 0.21% and the Nasdaq inched up 0.04%.